“This will not happen again,” he implied in deleted posts, warning of repercussions for retail traders. As the GameStop mania gripped markets in late January 2021, Burry, who had built a massive long position in the retailer back in 2019, took a contrarian turn. Yet Tesla reached an all-time high above $1,200, split-adjusted, up another 50% from its December close. Burry’s position, now public knowledge, faced intense scrutiny, with short sellers collectively losing billions. At the time, Tesla shares were still doubling every few months, propelled by inclusion in the S&P 500 and record deliveries. “My last Big Short got bigger and bigger and BIGGER too,” he posted, drawing parallels to his housing bet while insisting the EV maker’s valuation would “implode soon.”

Passive Investing And Etfs Could Amplify Market Downturn

According to Bloomberg, the sentiment in the crypto market has been under pressure since October 2025, when a surprise weekend crash triggered billions of dollars in liquidations. In a 2 February Substack post, Burry said that the cryptocurrency’s decline may have compelled the institutional investors and corporate treasurers to unload positions in other assets to cover losses. Yet current investor sentiment, as measured by the CBOE Volatility Index (VIX), remains low, suggesting complacency. When contrarian investing legend Michael Burry stakes $1.6 billion on put options against the S&P 500 and Nasdaq 100, the market takes notice. Just as investors can dollar-cost average into a stock or index, you can employ a similar strategy and sell a portion of your gains each month. If a stock you own has been a multi-bagger in a short period of time and now trades at a ridiculous multiple like 100 or 200 times forward earnings, it may be time to start trimming and taking some gains, at the very least.

Understanding Burry’s Bearish Bet Against Ai Fundamentals

For individual investors, Burry’s moves shouldn’t be interpreted as a directive to sell AI stocks or rush to buy puts immediately. The market can remain irrational longer than investors can remain solvent, as the famous saying goes, and put options have expiration dates that add timing pressure to the equation. As the founder of Scion Capital, he was one of the first investors to recognize the systemic problems in the housing market.

Stocks Mentioned

Burry’s Scion Asset Management discloses massive put options against QQQ and SPY in SEC filing. Timing the market remains a risky strategy. Burry suggests a market downturn could be widespread.

Can his warning be taken at face value or just shrugged off as an attention-seeking gimmick? Then he took potshots at Nvidia for its stock-based compensation accounting. For market participants, this represents an opportunity to reassess their own assumptions and ensure their portfolios are positioned appropriately for whatever comes next. Whether this proves to be another prescient call that cements his legacy or another recent misstep from a legendary investor remains to be seen. This demonstrates that he’s not simply bearish on the entire market, but instead has specific concerns about AI-related valuations. This strategy provides leverage and defined risk, allowing smartytrade review him to tap prominent positions without unlimited downside exposure.

Michael Burry’s Latest Predictions: $16 Bn Short, Long Positions Revealed

Pointing towards the end-of-January dip in gold and silver prices, he added, "It looks like up to $1 billion in precious metals were liquidated at the month’s very end as a result of falling crypto prices." On Wednesday, the price slumped to $71,739 in New York, and the token is down nearly 17% in 2026, with the broader crypto market losing over $460 billion in value the previous week. Burry believes the recent drop in the largest and most popular cryptocurrency could have ripple effects across markets, particularly in gold and silver. Burry’s Scion also reveals long positions in companies such as Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna.

February 7, 2021: Inflation To Annihilate Bitcoin

• As a result, investors are more likely to passively invest and buy the dip, especially when the government and the Federal Reserve appear to always intervene to stabilize market conditions as they seem to be rapidly deteriorating.
• Cost basis and return based on previous market day close.
• He says AI and tech stock valuations are dangerously inflated.
• Burry appears to be betting on a major market downturn, while also taking long positions in some companies, as revealed by his latest SEC filing.
• Exact losses remain undisclosed, but filings suggest heavy writedowns, capping a streak where Burry’s crash calls repeatedly failed and were caught on the wrong side of a bull market repeatedly.

Burry advised Elon Musk to issue shares at peak prices to lock in gains, implying an imminent correction of 80% or more. He had tweeted months earlier that Tesla’s reliance on regulatory credits masked underlying weaknesses, calling its market cap—then over $500 billion—”ridiculous” and unsustainable. Burry’s fund reportedly navigated the period with selective bets, but his broad alarm proved premature, setting the tone for a string of overlooked uptrends.

According to a Bank of New York Mellon report, margins have come in stronger than expected, driving the market rally. Corporate earnings, a primary driver of the market, hold out more promise. The tech sector has led the market rally this year, as evidenced by the 19% gain by the Invesco QQQ Trust (QQQ) The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the broader S&P 500 Index, has gained 16.42%, on top of the 24.5% jump in the previous year, and the nearly 26% gain in 2023.

• Burry’s Scion also reveals long positions in companies such as Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna.
• Even when Burry turned out to be right and made tremendous profits for his investors, during the recent interview, he said that nobody called to apologize, but also that he didn’t expect anyone to, either.
• Burry purchased put options on one million Nvidia shares, valued at approximately $186.6 million, and put options on five million Palantir shares, worth roughly $912.1 million.

Long Positions Disclosed

The filing also revealed that Burry maintains some bullish positions, including call options on Halliburton and Pfizer, as well as share positions in Molina Healthcare, Lululemon, and SLM Corp. These are the fundamental charts of the AI sector that Michael Burry shared on his X post, which he has based his bearish put options bets on. His investing philosophy centers on deep fundamental analysis and a willingness to stand alone when his research contradicts popular narratives.

January 2021: Tesla’s Imminent Implosion Reiterated

• Today the market has institutional ETFs, greater liquidity depth, and better regulatory infrastructure.
• Spot platinum was up 2.1% to $2,272.55 per ounce after hitting an all-time high of $2,918.80 on 26 January, while palladium added 0.7% at $1,787.55.
• Now, I think the whole thing is just going to come down, and it will be very hard to be long stocks in the United States and protect yourself.
• Burry’s position, now public knowledge, faced intense scrutiny, with short sellers collectively losing billions.

What his positioning does suggest is that serious investors with proven analytical capabilities see meaningful downside risk in AI valuations at current levels. His track record demands attention, but timing market corrections is notoriously difficult even for the most skilled investors. Many internet companies that failed during that crash were working on legitimate business models, but their stock prices had run too far ahead of reality. Put options give the holder the right to sell shares at a predetermined price, making them profitable when stock prices decline.

He points to passive investing and the dominance of big tech firms. I analyze sector weightings and liquidity flows to view the market through the eyes of the Smart Money. These moves align with his 2022 bet on a single prison company stock, a quintessential contrarian move that later liquidated at a loss—a reminder that even legends can misfire. Burry’s exit from SPY/QQQ and pivot to shorting the semiconductor ETF (SOXX)—a key tech enabler—suggests skepticism about overvaluation. Critically, Burry closed these positions by Q3 2023, signaling either profit-taking or a tactical retreat.